The logo is seen at the Bank of England in the City of London January 16, 2014.

Reuters/Luke MacGregor

LONDON The Bank of England may appoint a judge, academic or senior financial industry executive to run an independent inquiry into its actions in relation to allegations it allowed manipulation of the foreign exchange market, the Sunday Telegraph reported.

The newspaper, citing unnamed sources, said the "heavyweight figure" will examine the central bank's actions in relation to the allegations and how it handled them.

The bank has already appointed the law firm Travers Smith to prepare a report on the affair which will be made public.

However, the Sunday Telegraph said Travers Smith is on a fact finding exercise rather than an inquiry.

The Bank has suspended an employee as part of an internal probe into what Bank officials knew about alleged manipulation of key currency rates by traders.

The Bank also released on Wednesday minutes of meetings between its FX officials and chief dealers in London stretching back over several years that showed concerns over possible manipulation were raised as far back as 2006.

Regulators have said the alleged manipulation of the $5.3 trillion-a-day market - the world's largest financial market - is as bad as the Libor interest rate rigging which has resulted in banks shelling out $6 billion (3 billion pounds) in fines and settlements.